Virgin Trains USA has issued a new bond sale prospectus preparing for the issuance of $1.5 billion in private activity bonds to finance its planned South Florida to Miami higher-speed passenger train.
The new prospectus, issued Wednesday, provides newly-released or revised details for the company’s plans to run passenger trains in Florida, including suggesting it may seek second stations in Miami, at PortMiami, and Fort Lauderdale, at the Fort Lauderdale-Hollywood International Airport, to expand the passenger train service already connecting Miami, Fort Lauderdale, and West Palm Beach.
The company, formerly known as Brightline, and before that as All Aboard Florida, had filed in February to ask the Florida Development Finance Corp. to approve a total issuance of up to $2.7 billion worth of private activity bonds. That corporation, Florida’s private financing agency, was on the verge of voting on whether to do so earlier this month. But the agency ran out of time at its public meeting and tabled the request. Now Virgin Trains is coming back with a new request for $900 million more, on top of the $1.5 billion worth of private activity bonds the FDFC approved last year, which the company now is proposing issuing
The company has been battling long-held and stern opposition, particularly along the Treasure Coast counties, but has settled most of those complaints. It still faces opposition, primarily from government leaders and private citizens in Indian River County. At the FDFC meeting in Orlando on March 6, they challenged the company’s financial and ridership projections and sought to warn state officials that if the company were to financially fail the state of Florida might be put in a position to consider a bailout.
Virgin Train officials strongly disputed the criticism and dismissed the critics’ worst-case scenarios. Those battles are likely to emerge again at the FDFC April 5 meeting, with new sets of projections and details.
The company wants to extend its existing, private, passenger train service in South Florida up through the Treasure and Space coasts, and then westward to the Orlando International Airport, within about three years.
Soon after that, the company tells prospective investors, it expects its trains to be carrying about 6.5 million passengers a year between and through Florida’s two most significant tourist destinations.
In addition to the possibility of new stations in Miami and Fort Lauderdale, the prospectus discusses two stations envisioned for Virgin Trains’ proposed third phase of development, which would one day connect Orlando and Tampa.
The documents allow for the possibilities the company will have to finance new stations in Tampa and Walt Disney World for that leg.
The document does not discuss any proposed stations along Florida’s Treasure Coast or Space Coast, two areas lying along the route for the companies planned expansion from West Palm Beach to Orlando.
Virgin Trains USA officials have previously discussed the possibility of a station in the area of Stuart, Saint Lucie or Fort Pierce, and also, more broadly, a possible station in Brevard County.
Nor does the prospectus discuss a shared-use station with Central Florida’s SunRail commuter train, a possible project that had been mentioned in the company’s proposals to the Florida Department of Transportation.
The prospectus details some of the company’s projections for the West Palm Beach to Orlando route, though many of them have been released before:
— The West Palm Beach to Orlando connection would include 40 miles of track between Orlando International Airport and Cocoa, along the State Road 528 corridor, where the trains could travel as fast as 125 mph.
From Cocoa to West Palm Beach the trains could top out at 110 mph for that 129-mile stretch. The South Florida trains max out at 79 mph.
Altogether, a Virgin Trains trip between Miami and Orlando is being projected at three hours and 15 minutes, which the company maintains is faster than driving or flying, when airport time is counted.
— While there are no explicit descriptions of ticket prices, one section of the document works with a price tag of $100 per ticket for an Orlando-to-Miami trip on Virgin Trains, for comparisons to driving and flying costs.
— The document reports that the current South Florida trains carried about 73,000 passengers in January and 78,000 passengers in February, numbers that indicate that the first quarter of 2019 will be the fourth consecutive quarter in which the trains’ passenger counts exceeded the previous quarter’s.
— By 2023, after the South Florida to Miami route is opened, Virgin Trains projects about 3 million annual short-distance riders along its South Florida stretch and about 3.5 million long-distance riders coming from or heading to Orlando, according to the prospectus. That would work out to about 250,000 short-distance passengers per month.
“Ridership and revenue for the initial years of the Project is expected to start at relatively low levels and grow to a stabilized volume after two years,” the document states. “The low levels represent the time it takes for ridership to build up to long-term forecast levels as travelers become acquainted with the new rail service and adjust their trip-making habits.”
— The prospectus acknowledges the possibility of having to borrow to create an extension to Walt Disney World and a station there, as well as for the Tampa station, for the company’s envisioned Orlando to Tampa expansion.
Yet the document also suggests a “theme park extension,” perhaps costing $200 million, might also be a factor, perhaps envisioning tracks from the Orlando airport to Disney World and a Disney station regardless of if or when the Orlando to Tampa railroad is pursued.
— The document discusses the possible desire to add stations a PortMiami and Fort Lauderdale-Hollywood International Airport.
“PortMiami is the largest passenger cruise port in the world, with a new Virgin Voyages [a cruise company related to Virgin Trains through the Virgin Group] terminal expected to be completed by the end of 2021.
“The Company’s rail service is also conveniently located near Fort Lauderdale Airport, which is one of the fastest growing airports by the number of passengers, serving over 35 million travelers in 2018.
The Company estimates that each of these additional stations would cost approximately $20-30 million to construct and require one and a half years to complete,” the prospectus states.